Question

MA Notice of Change In Tax Return letter. NH Resident, Working Remotely

Forum|Forum|4 years ago
March 22, 2022
2 replies
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I live in NH but my office is in MA, which I understand is where the income source is. Since March 2020, I have worked remotely 100% of the time in NH. I followed all the prompts within the MA state program, but ended up getting this letter. They changed Line 5 "Wages, salaries...", 14e "Non-Mass Source Income", 15a "Paid to Social Security...", 20 "Total Deductions", 22 "Part-year residents...", and 41 "Income tax after credits...". This resulted in losing several hundred dollars from my return. I did apportion by working days of 365. Are there calculation error's within the MA state program or is MA just trying to get more money out of me, since they are losing a lot of taxes this year. They ripped people off for 2020 taxes, by saying you can't apportion due to the emergency order, so I wouldn't put it past the state. Am I wrong for expecting to get all my taxes that I paid in back? I also did have to pay into the MAPFML, which I know I won't get back.

T

TomD8

Employee

"I live in NH but my office is in MA, which I understand is where the income source is. Since March 2020, I have worked remotely 100% of the time in NH."

Remote work carried on from a NH location is not MA-source income. It is NH-source income. Wages and salaries are "sourced" where the work is actually performed. See Example (5)(a)(1.2) in this MA tax reference:

https://www.mass.gov/regulations/830-CMR-625a1-non-resident-income-tax#:~:text=Massachusetts%20Source%20Income%2C%20Massachusetts%20gross,Massachusetts%20in%20the%20year%20in

If all of your work in 2021 was carried on from a NH location, it is all NH-source income, and not taxable by MA. The only exception would be that if you were working in MA prior to Covid, and then began working from NH due to Covid, your remote income in that circumstance would be considered MA-sourced and would be taxable by MA.

https://www.mass.gov/regulations/830-CMR-625a3-massachusetts-source-income-of-non-residents-telecommuting-due-to-the-covid-19-pandemic#:~:text=Pursuant%20to%20this%20rule%2C%20all,Massachusetts%20due%20to%20a%20Pandemic%2D

This regulation expired on September 13, 2021.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

S

ScopexxAuthor

Thank you for your response. I would work remotely at least 4 days a month the year before pandemic hit, but since the pandemic I have been fully remote. I did forget that the emergency order didn't get lifted until June. The changes that they made removed all of my income apportioning, which I will now have to fight them for apportioning since Sept 15th.

KrisD15

Massachusetts is taxing most remote workers who were working in MA but are now working remotely for the same employer.

The question would be if you are working remotely because of a job change or because of Covid-19.

According to the state:

"There are special rules for wages or other compensation paid to employees who are working remotely (working from home or a location other than their usual work location) due to the COVID-19 Pandemic. For tax years 2020 and 2021, compensation paid to a nonresident for services that would normally be performed in Massachusetts are treated as Massachusetts source income subject to tax if they are performed in another state due to a Pandemic Related Circumstance and should be reported as taxable income on Form 1-NR/PY. "

"Pursuant to this rule, all compensation received for services performed by a non-resident who, immediately prior to the Massachusetts COVID-19 state of emergency was an employee engaged in performing such services in Massachusetts, and who is performing services from a location outside Massachusetts due to a Pandemic-Related Circumstance will continue to be treated as Massachusetts source income subject to personal income tax under M.G.L. c. 62, § 5A and personal income tax withholding pursuant to M.G.L. c. 62B, § 2."

MA LINK

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